A BILL to amend and reenact §22-3-11 of the Code of West Virginia,
1931, as amended, relating generally to the special
reclamation tax; continuing the Special Reclamation Fund;
establishing the Special Reclamation Water Trust Fund;
continuing and reimposing a tax on clean coal mined for
deposit into both funds; providing for the investment of
moneys thereby deposited; requiring the secretary to look at
alternative programs; and authorizing secretary to promulgate
legislative rules implementing the alternative programs.

Be it enacted by the Legislature of West Virginia:

That §22-3-11 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:ARTICLE 3. SURFACE COAL MINING AND RECLAMATION ACT.

§22-3-11. Bonds; amount and method of bonding; bonding
requirements; special reclamation tax and funds; prohibited acts; period of bond liability.

(a) After a surface mining permit application has been
approved pursuant to this article, but before a permit has been
issued, each operator shall furnish a penal bond, on a form to be
prescribed and furnished by the secretary, payable to the State of
West Virginia and conditioned upon the operator faithfully
performing all of the requirements of this article and of the
permit. The penal amount of the bond shall be not less than one
thousand dollars nor more than five thousand dollars for each acre
or fraction thereofof an acre: Provided, That the minimum amount
of bond furnished for any type of reclamation bonding shall be ten
thousand dollars. The bond shall cover: (1) The entire permit
area; or (2) that increment of land within the permit area upon
which the operator will initiate and conduct surface mining and
reclamation operations within the initial term of the permit. If
the operator chooses to use incremental bonding, as succeeding
increments of surface mining and reclamation operations are to be
initiated and conducted within the permit area, the operator shall
file with the secretary an additional bond or bonds to cover the
increments in accordance with this section: Provided, however,
That once the operator has chosen to proceed with bonding either
the entire permit area or with incremental bonding, the operator
shall continue bonding in that manner for the term of the permit.
(b) The period of liability for bond coverage begins with issuance of a permit and continues for the full term of the permit
plus any additional period necessary to achieve compliance with the
requirements in the reclamation plan of the permit.
(c)(1) The form of the bond shall be approved by the secretary
and may include, at the option of the operator, surety bonding,
collateral bonding (including cash and securities), establishment
of an escrow account, self-bonding or a combination of these
methods. If collateral bonding is used, the operator may elect to
deposit cash or collateral securities or certificates as follows:
Bonds of the United States or its possessions of the Federal Land
Bank or of the Homeowners' Loan Corporation; full faith and credit
general obligation bonds of the State of West Virginia or other
states and of any county, district or municipality of the State of
West Virginia or other states; or certificates of deposit in a bank
in this state, which certificates shall be in favor of the
department. The cash deposit or market value of suchthe
securities or certificates shall be equal to or greater than the
penal sum of the bond. The secretary shall, upon receipt of any
deposit of cash, securities or certificates, promptly place the
same with the Treasurer of the State of West Virginia whose duty it
is to receive and hold the samedeposit in the name of the state in
trust for the purpose for which the deposit is made when the permit
is issued. The operator making the deposit is entitled, from time
to time, to receive from the State Treasurer, upon the written approval of the secretary, the whole or any portion of any cash,
securities or certificates so deposited, upon depositing with him
or her in lieu thereof cash or other securities or certificates of
the classes herein specified in this subsection having value equal
to or greater than the sum of the bond.
(2) The secretary may approve an alternative bonding system if
it will: (A) Reasonably assure that sufficient funds will be
available to complete the reclamation, restoration and abatement
provisions for all permit areas which may be in default at any
time; and (B) provide a substantial economic incentive for the
permittee to comply with all reclamation provisions.
(d) The secretary may accept the bond of the applicant itself
without separate surety when the applicant demonstrates to the
satisfaction of the secretary the existence of a suitable agent to
receive service of process and a history of financial solvency and
continuous operation sufficient for authorization to self-insure.
(e) It is unlawful for the owner of surface or mineral rights
to interfere with the present operator in the discharge of the
operator's obligations to the state for the reclamation of lands
disturbed by the operator.
(f) All bond releases shall be accomplished in accordance with
the provisions of section twenty-three of this article.
(g) The Special Reclamation Fund previously created is
continued. The Special Reclamation Water Trust Fund is created within the State Treasury into and from which moneys shall be paid
for the purpose of assuring a reliable source of capital to reclaim
and restore water treatment systems on forfeited sites. The moneys
accrued in theboth funds, includingany interest earned thereon
and yield from investments by the State Treasurer or West Virginia
Investment Management Board are reserved solely and exclusively for
the purposes set forth in this section and section seventeen,
article one of this chapter. The fundfunds shall be administered
by the secretary who is authorized to expend the moneys in the fund
both funds for the reclamation and rehabilitation of lands which
were subjected to permitted surface mining operations and abandoned
after the third day of August, one thousand nine hundred
seventy-seven, where the amount of the bond posted and forfeited on
the land is less than the actual cost of reclamation, and where the
land is not eligible for abandoned mine land reclamation funds
under article two of this chapter. The secretary shall develop a
long-range planning process for selection and prioritization of
sites to be reclaimed so as to avoid inordinate short-term
obligations of the assets in theboth funds of such magnitude that
the solvency of the fundeither is jeopardized. The secretary may
use the special reclamation fundboth funds for the purpose of
designing, constructing and maintaining water treatment systems
when they are required for a complete reclamation of the affected
lands described in this subsection. The secretary may also expend an amount not to exceed ten percent of the total annual assets in
the fundboth funds to implement and administer the provisions of
this article and, as they apply to the Surface Mine Board, articles
one and four, chapter twenty-two-b of this code.
(h)(1) Prior to the first day of January, two thousand two,
every person conducting coal surface mining operations shall
contribute into the fund a sum equal to three cents per ton of
clean coal mined. For tax periods commencing on and after the
first day of January, two thousand twoJuly, two thousand eight,
every person conducting coal surface mining shall contribute into
the fundremit a special reclamation tax as follows: (A) For athe
initial period not to exceed fifty-sevenof twelve months, ending
the thirtieth day of June, two thousand nine, seven and four-tenths
cents per ton of clean coal mined, andthe proceeds of which shall
be allocated by the secretary for deposit in the Special
Reclamation Fund and the Special Reclamation Water Trust Fund; (B)
an additional seven cents per ton of clean coal mined, the proceeds
of which shall be deposited in the Special Reclamation Fund. The
tax shall be levied upon each ton of clean coal severed or clean
coal obtained from refuse pile and slurry pond recovery or clean
coal from other mining methods extracting a combination of coal and
waste material as part of a fuel supply. on or after the first day
of January, two thousand two The additional seven-cent tax shall
be reviewed and, if necessary, adjusted annually by the Legislature upon recommendation of the council pursuant to the provisions of
section seventeen, article one of this chapter: Provided, That the
tax may not be reduced until the Special Reclamation Fund hasand
Special Reclamation Water Trust Fund have sufficient moneys to meet
the reclamation responsibilities of the state established in this
section.
(2) In managing the Special Reclamation Program, the secretary
shall: (A) Pursue cost-effective alternative water treatment
strategies; and (B) conduct formal actuarial studies every two
years and conduct informal reviews annually on the Special
Reclamation Fund and Special Reclamation Water Trust Fund.(3) Prior to the thirty-first day of December, two thousand
five, the secretary shall: (A) Determine the feasibility of
allowing full cost bonding in lieu of a portion of the per ton coal
tax. In making this determination, the secretary shall consider
the availability and affordability of full cost bonding to
operators and the overall fiscal stability of the Special
Reclamation Program; (B) determine the feasibility of creating a
water quality trust fund to provide long-term funding for water
treatment from forfeited sites and to reduce a portion of the per
ton coal tax. In making this determination, the secretary shall
consider the availability and fiscal stability of any funding for
a water quality trust fund and any impact it may have on the
overall fiscal stability of the Special Reclamation Program; and (C) Determine the feasibility of establishing a bonding requirement
for water treatment activities in lieu of a portion of the per ton
coal tax. In making this determination, the secretary shall
consider the availability and affordability of bonding to operators
and the overall fiscal stability of the Special Reclamation
Program. (4) If the secretary determines that full cost bonding,
water treatment bonding, the establishment of a water quality trust
fund, or the use of other funding mechanisms, or a combination of
any or all of these financial assurance mechanisms, reasonably
assure that sufficient funds will be available to complete the
reclamation of a forfeited site and that the special reclamation
fund will remain fiscally stable, the secretary is authorized to
propose legislative rules in accordance with article three, chapter
twenty-nine-a of this code to implement a full cost bonding
program, a water reclamation bonding program, a water quality trust
fund program, or other funding mechanisms, or a combination
thereof, in lieu of the per ton coal tax or a portion thereof.(3) Prior to the thirty-first day of December, two thousand
eight, the secretary shall:
(A) Determine the feasibility of creating an alternate
program, on a voluntary basis, for financially sound operators by
which those operators pay an increased tax into the Special
Reclamation Fund in exchange for a maximum per-acre bond that is
less than the maximum established in subsection (a) of this section;
(B) Determine the feasibility of creating an incremental
bonding program by which operators can post a reclamation bond for
those areas actually disturbed within a permit area, but for less
than all of the proposed disturbance and obtain incremental release
of portions of that bond as reclamation advances so that the
released bond can be applied to approved future disturbance; and
(C) Determine the feasibility for sites requiring water
reclamation by creating a separate water reclamation security
account or bond for the costs so that the existing reclamation bond
in place may be released to the extent it exceeds the costs of
water reclamation.
(4) If the secretary determines that the alternative program,
the incremental bonding program or the water reclamation account or
bonding programs reasonably assure that sufficient funds will be
available to complete the reclamation of a forfeited site and that
the Special Reclamation Fund will remain fiscally stable, the
secretary is authorized to propose legislative rules in accordance
with article three, chapter twenty-nine-a of this code to implement
an alternate program, a water reclamation account or bonding
program or other funding mechanisms or a combination thereof.
(i) This special reclamation tax shall be collected by the
State Tax Commissioner in the same manner, at the same time and
upon the same tonnage as the minimum severance tax imposed by article twelve-b, chapter eleven of this code is collected:
Provided, That under no circumstance shall the special reclamation
tax be construed to be an increase in either the minimum severance
tax imposed by said article or the severance tax imposed by article
thirteen of said chapter.
(j) Every person liable for payment of the special reclamation
tax shall pay the amount due without notice or demand for payment.
(k) The Tax Commissioner shall provide to the secretary a
quarterly listing of all persons known to be delinquent in payment
of the special reclamation tax. The secretary may take the
delinquencies into account in making determinations on the
issuance, renewal or revision of any permit.
(l) The Tax Commissioner shall deposit the feesmoneys
collected with the Treasurer of the State of West Virginia to the
credit of the Special Reclamation Fund and Special Reclamation
Water Trust Fund.The moneys in the fund shall be placed by the
Treasurer in an interest-bearing account with the interest being
returned to the fund on an annual basis.
(m) At the beginning of each quarter, the secretary shall
advise the State Tax Commissioner and the Governor of the assets,
excluding payments, expenditures and liabilities, in the fundboth
funds.
(n) To the extent that this section modifies any powers,
duties, functions and responsibilities of the department that may require approval of one or more federal agencies or officials in
order to avoid disruption of the federal-state relationship
involved in the implementation of the Federal Surface Mining
Control and Reclamation Act, 30 U. S. C. §1270 by the state, the
modifications will become effective upon the approval of the
modifications by the appropriate federal agency or official.